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etail giant PT Hero Supermarket Tbk (Hero) announced that it had booked net profits of Rp 274 billion (US$30.41 million) in 2011, up 23 percent from 2010 based on a substantial increase in revenues.

Hero’s net revenue was recorded at Rp 7.65 trillion through 2011, a 17 percent increase from 2010, after opening 61 new stores, including two hypermarkets and 14 supermarkets, according to a stock exchange filing submitted on Monday.

Cost of revenue, which Hero spent to deliver products it sold, increased by 18.1 percent to Rp 6.81 trillion, eating away at Hero’s net income.

As of last year, Hero operates 533 stores, comprising 39 Giant hypermarkets, 131 Hero and Giant supermarkets, 231 Guardian health and beauty stores, and 132 Starmart convenience stores.

“We are happy to announce that our brands performed well in 2011 amid great competition,” president director Philippe Broianigo said in the statement.

Established in 1971 with only a small store in Kebayoran Baru, South Jakarta, to meet the needs of expatriates living in the area, Hero, now one of the largest retail chains in Indonesia, has been under pressure from French hypermarket Carrefour.

South Korea’s Lotte Mart and Hypermart, a subsidiary of fashion retail giant PT Matahari Putra Prima Tbk (MPA), are also expanding their presence in the world’s fourth-largest market, which has seen rising purchasing power during recent times of stable economic growth.

Other major competitors to Hero’s business are convenience stores such as 7-Eleven, Alfamart, Indomaret and Circle K.

“Changes in management and operations have occurred during the year to prepare the company for further expansion. We are committed to continue developing our brands to be more profitable,” Broianigo said.

Hero, which employs some 13,700 people, claimed assets worth Rp 3.72 trillion as of December last year, up 18.4 percent from the same period in 2010.

Indonesia’s overall retail sector was forecast to have booked Rp 120 trillion revenues last year. The Indonesian Retailers Association (Aprindo) expected a 15 percent increase in retail revenues this year to Rp 138 trillion because of strong household consumption in the domestic economy.

“The growth will be mainly driven by sales of consumer goods, such as food and beverages, fashion items and then electronics products and others,” Aprindo executive director Tutum Rahanta said.

Retail outlets are also expected to grow by 16.7 percent from the existing 15,000 modern outlets at present, he added.

Hero’s shares traded at Rp 16,000 on Feb. 13, when shares stopped trading after surging 45.5 percent so far this year. The company has an estimated market capitalization of Rp 5.3 trillion.

Last month Hero announced a plan for a stock split by a ratio of 1:10, which will change share prices and the number of shares, but market capitalization and shareholders’ ownership will remain the same.

Hero director Saye Chuan Lai said the move is expected to boost the company’s share trading on the Indonesia Stock Exchange (IDX). Following the stock split, Hero’s shares’ nominal value will change to Rp 50 per share with total shares held by the public at 188.43 million.